With help from Emily Birnbaum
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— Next up for the Senate’s antitrust push: Sen. Amy Klobuchar tells MT how she’ll try to get colleagues on board for a floor vote on her tech bill.
— Inside that McCarthy fundraiser: Two Microsoft lobbyists attended the House minority leader’s fundraiser, despite their employer’s pledge not to donate to Republicans who objected to certifying the 2020 presidential election.
— Broadband scrutiny inbound: With billions in internet subsidies set to be disbursed, the tough questions Agriculture Secretary Tom Vilsack faced Thursday are a taste of oversight to come.
HAPPY FRIDAY TO ALL. John Hendel in your inbox yet again, filling in for my last MT this week and passing the baton to my colleague Emily Birnbaum ([email protected]) for Monday’s edition. And for Washingtonians seeking weekend tech amusement, I endorse the FUTURES exhibit of the Smithsonian’s Arts and Industry Building (the organizers even spotlighted broadband!).
Keep sending all your telecom gossip and intrigue my way on Twitter at @JohnHendel or by email at [email protected]. Got an event for our calendar? Send details to [email protected]. Anything else? Team info below. And don’t forget: Add @MorningTech and @PoliticoPro on Twitter.
ANTITRUST OBSTACLES AHEAD — The Senate Judiciary Committee’s 16-6 approval of its first big tech antitrust bill, S. 2992 (117), was undeniably an enormous win for the bill’s co-sponsors (especially Klobuchar, who chairs the Senate Judiciary antitrust subcommittee), as well as anti-monopoly advocacy groups, small tech companies and antitrust hawks who have pushed for Congress to act for years. “This is the first time that a major tech competition bill has gone through a Senate committee, and it went through in a highly polarized atmosphere,” Klobuchar told MT.
But the real challenge will be what comes next: passing the legislation in the Senate. (Not to mention the little detail about finding the votes in the House.) Here are the main areas of disagreement in the upper chamber that Thursday’s markup helped expose:
— Californians stick together: The panel’s California Democrats, Sens. Dianne Feinstein and Alex Padilla, both voted for the bill. But during the markup, both made it clear that they oppose some of the legislation’s core provisions. Padilla said he believes the bill is not “balanced” enough and could potentially hurt tech products that consumers rely on, and Feinstein said she doesn’t think it’s right for legislation to target specific companies — particularly those in her home state.
California members in the House have also linked arms in opposition to the lower chamber’s version of the legislation, with many claiming that it could hurt the state’s most successful companies. It’s unclear if any tweaks could assuage the California caucus’ concerns.
— Data privacy questions: Apple and Google have forcefully argued that the legislation could hamper their ability to provide robust privacy protections to users. Several Democratic senators echoed that concern, including Democratic Sens. Chris Coons of Delaware and Patrick Leahy of Vermont. Leahy said he’s concerned the bill “could lead to a race to the bottom,” and predicted that privacy issues will be “discussed on the floor.”
Klobuchar said she plans to hear out those concerns and explain that she believes they’ve been addressed in her manager’s amendment with Sen. Chuck Grassley (R-Iowa).
— Security worries: The big tech companies and their allies have argued that the legislation could harm national security, an issue that came up multiple times throughout the markup. The committee adopted Sen. John Cornyn’s (R-Texas) amendment, which would shield U.S. tech companies’ data from being shared with the Chinese government (a detail that was clarified quickly through scribbles on the amendment), by 22-0.
And the next big question on everyone’s mind: What’s Senate Majority Leader Chuck Schumer thinking? Schumer did not immediately respond to MT’s request for comment. “What we didn’t let happen was that the bill was whittled down to nothing,” Klobuchar said. “[The companies] are so used to everything being whittled down.”
MICROSOFT AND MCCARTHY — A pair of Microsoft lobbyists attended a record-shattering fundraiser for House Minority Leader Kevin McCarthy on Wednesday night — despite the company’s pledge to not give money to lawmakers who objected to certifying the 2020 election, as McCarthy did.
— Two sources told Emily that Fred Humphries, Microsoft’s top lobbyist, donated tens of thousands of dollars to McCarthy, with proceeds going to the minority leader’s campaign and GOP leadership PAC accounts as well as the National Republican Congressional Committee. Tickets for the McCarthy fundraiser went from $25,000 to $100,000. (Humphries last year announced Microsoft’s commitment to not contribute to election objectors in a blog post, calling the move important for the “stability and future of American democracy.”)
Allison Halataei, a Republican Microsoft lobbyist, also attended the McCarthy fundraiser but did not donate, according to a Microsoft spokesperson. Earlier this month, Microsoft reiterated its pledge not to give to Republican objectors in 2022 — but it did not specify that its lobbyists could not give to them as individuals.
— Both Humphries and Halataei attended the event in their personal capacity. But that line is blurry for lobbyists, whose careers are built on gaining access to and influencing policymakers. It’s a significant loophole in corporate pledges to not give to election objectors, underlining how companies are inching back into the GOP’s tent as a Republican win during the midterms becomes likelier.
And even attending in a personal capacity could “be an abrogation of Microsoft’s commitment not to support those who are insurrectionists,” said Craig Holman, a government ethics expert at advocacy group Public Citizen. “If Microsoft wanted to honor their commitments, they should prohibit their employees from participating in that kind of fundraising.”
Two of the co-hosts of the McCarthy fundraiser, lobbyists Sam Geduldig and John Stipicevic, work for firms that represent Microsoft. The host of the event, Jeff Miller, represents Amazon and Apple. “We’re seeing more and more corporations wanting to get around their initial pledge,” Holman said. “We’re getting back into the reality of the elections coming up in 2022, so a lot of these corporations are either reversing themselves on the pledge or trying to find other ways of getting around it.”
HILL OVERSIGHT TIGHTENS AMID COMING BROADBAND SURGE — With billions of dollars set to flow to internet connectivity, lawmakers are questioning how the Biden administration plans to coordinate spending them. And as a Thursday hearing showed, some are also skeptical of what policy imprints the Biden administration may try to impose on these funds.
— Enter Vilsack: In the hot seat before the House Agriculture Committee, Vilsack fielded several questions from lawmakers of both parties about how the department has set up its latest round of $1.15 billion in broadband loan and grant funding through its ReConnect program, which will accept applications through Feb. 22. The infrastructure law President Joe Biden signed last year slated an additional $2 billion for ReConnect.
— Questions on criteria: Reps. Troy Balderson (R-Ohio), Randy Feenstra (R-Iowa) and Angie Craig (D-Minn.) were among those peppering Vilsack with questions about USDA’s new points system for prioritizing applicants. When Biden originally proposed his $100 billion for broadband last year, he recommended giving money first to local governments, nonprofits and cooperatives — not companies, including local internet service providers — and that same preference system has found its way into USDA’s scoring. Craig asked “why USDA decided to deprioritize those community providers.”
Others worried about USDA’s changes to what counts as an “underserved” eligible population, which now means any area lacking 100 Megabits/second download over 20 upload speeds, well above the FCC broadband definition of 25/3 Mbps and an even lower standard USDA previously used — changes that could pit new grantees against ISPs in areas that already enjoy some minimal internet connectivity. “You have private-sector companies now competing with government,” Feenstra asserted. “I think that’s very wrong.”
And Rep. Kat Cammack (R-Fla.) questioned why USDA was awarding prioritization points for ISPs making net neutrality commitments when the Obama-era FCC net neutrality rules were repealed during the Trump era (some Senate Republicans opposed confirming Biden pick for broadband chief, Alan Davidson, over this issue, fearing he might apply similar obligations to Commerce Department grant funding; FCC Chair Jessica Rosenworcel recently told senators neither she nor FCC staff had provided input on the USDA’s net neutrality provision).
— Vilsack explains: The agriculture secretary vigorously defended his department’s points set-up as balanced, reflecting a mix of priorities. “There is a need for additional capacity, which we’ve learned during the course of the pandemic,” he told one lawmaker of higher favored speeds. “It’s equipping rural America to basically have the kind of broadband access that is meaningful and can actually make a difference.”
25/3 Mbps won’t be enough for future precision agriculture and distance learning needs, he added, noting points awarded for serving rural and economically struggling areas and vulnerable populations like seniors can “offset” an applicant’s perceived disadvantages and keep steering dollars toward the neediest communities. Areas lacking even those 25/3 Mbps speeds “go to the top of the list” under current criteria, he noted.
And his caveat: “This is an ongoing, iterative process and we learn,” Vilsack told lawmakers, saying criteria could evolve in future funding rounds.
— Bigger picture: Congress will apply similar questioning to a panoply of broadband-focused agencies, from the Commerce Department (now setting up plans this year for disbursing $48 billion) to the Treasury Department (which runs pandemic relief funds that can flow to broadband). We’re already seeing debate over the merits of Treasury’s funding plans: The Institute for Local Self-Reliance largely likes the department’s recent final rule, while GOP FCC Commissioner Brendan Carr recently warned of its “misplaced priorities and misguided approach.”
Sarah Oh, a nonresident fellow at The Atlantic Council’s Digital Forensic Research Lab who formerly worked at Facebook, is joining Twitter as a human rights adviser … Lukas Pietrzak, a program manager at Next Century Cities, announced he’ll be joining NTIA’s Office of Internet Connectivity and Growth next month … Ge Yu is leaving as director of corporate communications for China Telecom Americas … Apple tapped longtime employee Kristin Huguet Quayle as new head of PR, replacing Stella Low, per BuzzFeed … Business intelligence platform ZoomInfo hired Simon McDougall, a former U.K. data protection regulator, as its first chief compliance officer … House of Representatives Chief Administrative Officer Catherine Szpindor told lawmakers that her office is“building an innovative House Digital Service team of technology experts skilled in customer relations and business analysis, design, and implementation” … Amira Valliani is joining the Solana Foundation, where she’ll run the policy team and work at the intersection of web3 and government. … Reps. Darrell Issa (R-Calif.) and Gerry Connolly (D-Va.) launched the IT Modernization Caucus.
Chips ahoy: Intel is committing $20 billion to build a new semiconductor factory near Columbus, Ohio, Time reports.
Getting beyond Silicon Valley: “What we need are economic policies that seed digital jobs all over the country,” Rep. Ro Khanna (D-Calif.) writes in an op-ed.
Elizabeth Warren still wants to break up Big Tech: The Massachusetts senator goes deep on tech in a chat with Kara Swisher.
Tech in the White House: Biden met Thursday with the President’s Council of Advisors on Science and Technology (full readout here).
Another bite at the Apple: Epic Games has appealed last year’s ruling favoring Apple, Bloomberg reports.
Latest on the 5G fracas: “The FAA has approved more instructions that will allow aircraft to land in bad weather at airports where 5G has been deployed,” POLITICO’s Oriana Pawlyk reports.
Bye-bye now: “YouTube has deactivated two channels linked to the Oath Keepers militia group whose members have been charged in relation to the January 6 Capitol riot,” per Axios.
More farewells: “Twitter shook up the top ranks of its security team this week with the termination of the head of security and the exit of the chief information security officer,” NYT reported.
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